Assume that `2,00,000 debentures can be raised at 10% rate of interest whereas `3,00,000 debentures can be
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● Assume that `2,00,000 debentures can be raised at 10% rate of interest whereas `3,00,000 debentures can be raised at 12% rate of interest. You are required to calculate the market value of the firm and the overall Cost of Capital using Traditional Approach.
12. Net operating income `75,000 Total investment `5,00,000 Cost of equity:
If the firm uses no debt 15%
If the firm uses `2,00,000 debentures 18%
If the firm uses `3,00,000 debentures 20%
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Related Book For 
Financial Management
ISBN: 9789352605606
1st Edition
Authors: Swapan Sarkar, Bappaditya Biswas, Samyabrata Das, Ashish Kumar Sana
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